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Tanzania vs. Rwanda

Economy

TanzaniaRwanda
Economy - overview

Tanzania has achieved high growth rates based on its vast natural resource wealth and tourism with GDP growth in 2009-17 averaging 6%-7% per year. Dar es Salaam used fiscal stimulus measures and easier monetary policies to lessen the impact of the global recession and in general, benefited from low oil prices. Tanzania has largely completed its transition to a market economy, though the government retains a presence in sectors such as telecommunications, banking, energy, and mining.

The economy depends on agriculture, which accounts for slightly less than one-quarter of GDP and employs about 65% of the work force, although gold production in recent years has increased to about 35% of exports. All land in Tanzania is owned by the government, which can lease land for up to 99 years. Proposed reforms to allow for land ownership, particularly foreign land ownership, remain unpopular.

The financial sector in Tanzania has expanded in recent years and foreign-owned banks account for about 48% of the banking industry's total assets. Competition among foreign commercial banks has resulted in significant improvements in the efficiency and quality of financial services, though interest rates are still relatively high, reflecting high fraud risk. Banking reforms have helped increase private-sector growth and investment.

The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's aging infrastructure, including rail and port, which provide important trade links for inland countries. In 2013, Tanzania completed the world's largest Millennium Challenge Compact (MCC) grant, worth $698 million, but in late 2015, the MCC Board of Directors deferred a decision to renew Tanzania’s eligibility because of irregularities in voting in Zanzibar and concerns over the government's use of a controversial cybercrime bill.

The new government elected in 2015 has developed an ambitious development agenda focused on creating a better business environment through improved infrastructure, access to financing, and education progress, but implementing budgets remains challenging for the government. Recent policy moves by President MAGUFULI are aimed at protecting domestic industry and have caused concern among foreign investors.

Rwanda is a rural, agrarian country with agriculture accounting for about 63% of export earnings, and with some mineral and agro-processing. Population density is high but, with the exception of the capital Kigali, is not concentrated in large cities – its 12 million people are spread out on a small amount of land (smaller than the state of Maryland). Tourism, minerals, coffee, and tea are Rwanda's main sources of foreign exchange. Despite Rwanda's fertile ecosystem, food production often does not keep pace with demand, requiring food imports. Energy shortages, instability in neighboring states, and lack of adequate transportation linkages to other countries continue to handicap private sector growth.

The 1994 genocide decimated Rwanda's fragile economic base, severely impoverished the population, particularly women, and temporarily stalled the country's ability to attract private and external investment. However, Rwanda has made substantial progress in stabilizing and rehabilitating its economy well beyond pre-1994 levels. GDP has rebounded with an average annual growth of 6%-8% since 2003 and inflation has been reduced to single digits. In 2015, 39% of the population lived below the poverty line, according to government statistics, compared to 57% in 2006.

The government has embraced an expansionary fiscal policy to reduce poverty by improving education, infrastructure, and foreign and domestic investment. Rwanda consistently ranks well for ease of doing business and transparency.

The Rwandan Government is seeking to become a regional leader in information and communication technologies and aims to reach middle-income status by 2020 by leveraging the service industry. In 2012, Rwanda completed the first modern Special Economic Zone (SEZ) in Kigali. The SEZ seeks to attract investment in all sectors, but specifically in agribusiness, information and communications, trade and logistics, mining, and construction. In 2016, the government launched an online system to give investors information about public land and its suitability for agricultural development.

GDP (purchasing power parity)
$162.5 billion (2017 est.)
$153.3 billion (2016 est.)
$143.3 billion (2015 est.)

note: data are in 2017 dollars

$24.68 billion (2017 est.)
$23.26 billion (2016 est.)
$21.94 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
6.98% (2019 est.)
6.95% (2018 est.)
6.78% (2017 est.)
6.1% (2017 est.)
6% (2016 est.)
8.9% (2015 est.)
GDP - per capita (PPP)
$3,200 (2017 est.)
$3,100 (2016 est.)
$3,000 (2015 est.)

note: data are in 2017 dollars

$2,100 (2017 est.)
$2,000 (2016 est.)
$1,900 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 23.4% (2017 est.)
industry: 28.6% (2017 est.)
services: 47.6% (2017 est.)
agriculture: 30.9% (2017 est.)
industry: 17.6% (2017 est.)
services: 51.5% (2017 est.)
Population below poverty line
22.8% (2015 est.)
39.1% (2015 est.)
Household income or consumption by percentage share
lowest 10%: 2.8%
highest 10%: 29.6% (2007)
lowest 10%: 2.1%
highest 10%: 43.2% (2011 est.)
Inflation rate (consumer prices)
5.3% (2017 est.)
5.2% (2016 est.)
4.8% (2017 est.)
5.7% (2016 est.)
Labor force
24.89 million (2017 est.)
6.227 million (2017 est.)
Labor force - by occupation
agriculture: 66.9%
industry: 6.4%
services: 26.6% (2014 est.)
agriculture: 75.3%
industry: 6.7%
services: 18% (2012 est.)
Unemployment rate
10.3% (2014 est.)
2.7% (2014 est.)
Distribution of family income - Gini index
37.6 (2007)
34.6 (2000)
50.4 (2013 est.)
51.3 (2010 est.)
Budget
revenues: 7.873 billion (2017 est.)
expenditures: 8.818 billion (2017 est.)
revenues: 1.943 billion (2017 est.)
expenditures: 2.337 billion (2017 est.)
Industries
agricultural processing (sugar, beer, cigarettes, sisal twine); mining (diamonds, gold, and iron), salt, soda ash; cement, oil refining, shoes, apparel, wood products, fertilizer
cement, agricultural products, small-scale beverages, soap, furniture, shoes, plastic goods, textiles, cigarettes
Industrial production growth rate
12% (2017 est.)
4.2% (2017 est.)
Agriculture - products
coffee, sisal, tea, cotton, pyrethrum (insecticide made from chrysanthemums), cashew nuts, tobacco, cloves, corn, wheat, cassava (manioc, tapioca), bananas, fruits, vegetables; cattle, sheep, goats
coffee, tea, pyrethrum (insecticide made from chrysanthemums), bananas, beans, sorghum, potatoes; livestock
Exports
$4.971 billion (2017 est.)
$5.697 billion (2016 est.)
$1.05 billion (2017 est.)
$745 million (2016 est.)
Exports - commodities
gold, coffee, cashew nuts, manufactures, cotton
coffee, tea, hides, tin ore
Exports - partners
India 21.8%, South Africa 17.9%, Kenya 8.8%, Switzerland 6.7%, Belgium 5.9%, Democratic Republic of the Congo 5.8%, China 4.8% (2017)
UAE 38.3%, Kenya 15.1%, Switzerland 9.9%, Democratic Republic of the Congo 9.5%, US 4.9%, Singapore 4.5% (2017)
Imports
$7.869 billion (2017 est.)
$8.464 billion (2016 est.)
$1.922 billion (2017 est.)
$2.036 billion (2016 est.)
Imports - commodities
consumer goods, machinery and transportation equipment, industrial raw materials, crude oil
foodstuffs, machinery and equipment, steel, petroleum products, cement and construction material
Imports - partners
India 16.5%, China 15.8%, UAE 9.2%, Saudi Arabia 7.9%, South Africa 5.1%, Japan 4.9%, Switzerland 4.4% (2017)
China 20.4%, Uganda 11%, India 7.2%, Kenya 7.1%, Tanzania 5.3%, UAE 5.1% (2017)
Debt - external
$17.66 billion (31 December 2017 est.)
$15.21 billion (31 December 2016 est.)
$3.258 billion (31 December 2017 est.)
$2.611 billion (31 December 2016 est.)
Exchange rates
Tanzanian shillings (TZS) per US dollar -
2,243.8 (2017 est.)
2,177.1 (2016 est.)
2,177.1 (2015 est.)
1,989.7 (2014 est.)
1,654 (2013 est.)
Rwandan francs (RWF) per US dollar -
839.1 (2017 est.)
787.25 (2016 est.)
787.25 (2015 est.)
720.54 (2014 est.)
680.95 (2013 est.)
Fiscal year
1 July - 30 June
calendar year
Public debt
37% of GDP (2017 est.)
38% of GDP (2016 est.)
40.5% of GDP (2017 est.)
37.3% of GDP (2016 est.)
Reserves of foreign exchange and gold
$5.301 billion (31 December 2017 est.)
$4.067 billion (31 December 2016 est.)

note: excludes gold

$997.6 million (31 December 2017 est.)
$1.104 billion (31 December 2016 est.)
Current Account Balance
-$1.313 billion (2019 est.)
-$1.898 billion (2018 est.)
-$622 million (2017 est.)
-$1.336 billion (2016 est.)
GDP (official exchange rate)
$51.76 billion (2017 est.)
$9.136 billion (2017 est.)
Stock of direct foreign investment - at home

NA

$2.378 billion (31 December 2017 est.)
$2.072 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad

NA

$113.2 million (31 December 2017 est.)
$26.8 million (31 December 2016 est.)
Market value of publicly traded shares
$1.803 billion (31 December 2012 est.)
$1.539 billion (31 December 2011 est.)
$1.264 billion (31 December 2010 est.)

NA

Central bank discount rate
8.25% (31 December 2010)
3.7% (31 December 2009)
7.75% (31 December 2010)
11.25% (31 December 2008)
Commercial bank prime lending rate
17.62% (31 December 2017 est.)
15.96% (31 December 2016 est.)
17.17% (31 December 2017 est.)
17.29% (31 December 2016 est.)
Stock of domestic credit
$9.045 billion (31 December 2017 est.)
$9.616 billion (31 December 2016 est.)
$1.861 billion (31 December 2017 est.)
$1.614 billion (31 December 2016 est.)
Stock of narrow money
$5.002 billion (31 December 2017 est.)
$4.641 billion (31 December 2016 est.)
$963.9 million (31 December 2017 est.)
$895 million (31 December 2016 est.)
Stock of broad money
$5.002 billion (31 December 2017 est.)
$4.641 billion (31 December 2016 est.)
$963.9 million (31 December 2017 est.)
$895 million (31 December 2016 est.)
Taxes and other revenues
15.2% (of GDP) (2017 est.)
21.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-1.8% (of GDP) (2017 est.)
-4.3% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 3.9%
male: 3.1%
female: 4.6% (2014 est.)
total: 20.6%
male: 18.8%
female: 22.6% (2018 est.)
GDP - composition, by end use
household consumption: 62.4% (2017 est.)
government consumption: 12.5% (2017 est.)
investment in fixed capital: 36.1% (2017 est.)
investment in inventories: -8.7% (2017 est.)
exports of goods and services: 18.1% (2017 est.)
imports of goods and services: -20.5% (2017 est.)
household consumption: 75.9% (2017 est.)
government consumption: 15.2% (2017 est.)
investment in fixed capital: 22.9% (2017 est.)
investment in inventories: 0.5% (2017 est.)
exports of goods and services: 18.2% (2017 est.)
imports of goods and services: -32.8% (2017 est.)
Gross national saving
25% of GDP (2017 est.)
23.1% of GDP (2016 est.)
24.9% of GDP (2015 est.)
12.5% of GDP (2017 est.)
6.1% of GDP (2016 est.)
7.5% of GDP (2015 est.)

Source: CIA Factbook